By Natalie Grover and Bhanvi Satija
(Reuters) -Novavax Inc’s shares plunged more than 26% in U.S. premarket trading on Wednesday, a day after the COVID-19 vaccine maker raised doubts about its ability to remain in business.
The stock had dropped 26.2% to $6.83 around 8:55 ET (13:55 GMT), while its Frankfurt-listed shares slumped more than 27%.
The company – whose COVID vaccine is its only marketed product after 35 years in business – on Tuesday flagged significant uncertainty around its 2023 revenue, funding from the U.S. government, and pending arbitration with global vaccine alliance Gavi.
Novavax’s shot, a traditional protein-based vaccine, was pitched as an alternative to those from Moderna and Pfizer-BioNTech in the hope it would win over skeptics of their newer mRNA technology, but manufacturing and regulatory delays led to sluggish uptake in key markets.
In the U.S., where the vaccine was authorized in July 2022, only around 80,000 of its shots have been administered, according to government data.
In Europe, the shot was initially given the green light in December 2021. Altogether, only 219,395 doses have been administered of nearly 13 million distributed in EU/EEA countries, according to data from the European Centre for Disease Control up to Feb. 23.
The shot was also endorsed by UK regulators last year. The Department of Health and Social Care did not immediately respond to a Reuters query on how many doses have been deployed so far.
Novavax, like other COVID vaccine makers, is also gearing up for changes to the way the vaccines are rolled out, with global regulators expecting vaccination campaigns to be conducted once a year, similar to flu inoculations.
Companies will need to change their vaccine each year to match circulating strains. Novavax faces near-term risks as protein-based vaccines take longer to produce than mRNA-based competitors, Novavax CEO John Jacobs has said.
Jefferies’ analysts said they were lowering Novavax’s peak COVID-19 market share to 15% from 25%, and cut their price target on the U.S. stock to $68 from $90. B Riley Securities’ analysts also slashed their price target to $10 from $29.
The challenges ahead of Novavax are unsurprising given the very late entry of its COVID-19 vaccine as countries transition to a post-pandemic environment, said Lee Brown, global sector lead for healthcare at research firm Third Bridge.
“While there is the potential for a substantial booster market … we don’t expect Novavax to be a major player in the booster opportunity.”
As of last close, Novavax’s U.S.-listed shares are down 97% from their February 2021 record high of $331.68.
(Reporting by Amanda Cooper and Natalie Grover in London, Amruta Khandekar and Bhanvi Satija in Bengaluru; Editing by Uttaresh Venkateshwaran and Mark Potter)
